Major scoop from @WSJ’s @Lingling_Wei about why the Chinese President Xi Jinping decides to block the IPO of Chinese billionaire Jack Ma’s Ant Group. wsj.com/articles/china…
“There was another key reason, according to more than a dozen Chinese officials and government advisers: growing unease in Beijing over Ant’s complex ownership structure—and the people who stood to gain most from what would have been the world’s largest IPO.”
A previously unreported central-government investigation found that Ant’s IPO prospectus obscured the complexity of the firm’s ownership, according to the officials and government advisers.
“Behind layers of opaque investment vehicles that own stakes in the firm are a coterie of well-connected Chinese power players, including some with links to political families that represent a potential challenge to President Xi and his inner circle.”
“Before the probe, regulators at the central bank were already worried about Ant’s business model. The company owns a mobile payments app called Alipay that is used by more than a billion people. “
"It makes profits from the transactions, while state-owned banks supply the majority of the funding and take on most of the risk."
“On one hand, you got a bunch of individuals potentially amassing large amounts of wealth,” one of the people familiar with the probe into the shareholders said. “Then on the other hand, much of the risk has been transferred to the state side.”
"The public blast of the state’s regulatory powers, coupled with the investigation into Ant’s ownership structure—which had started even before Mr. Ma’s speech—formed the basis for Mr. Xi’s decision to shut down Ant’s IPO and...
... force the company to scale back lending and other banklike services, according to the people familiar with the probe."
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